As part of a drive to reduce costs and make PSA's Opel-Vauxhall unit more competitive, workers at Opel in Germany will have their hours pegged at 35 hours per week. Opel has agreed a number of measures with labour union IG Metall that it hopes will reduce cost.

PSA managers have said in recent months that Opel/Vauxhall's cost base is out of line with other parts of its business.

The employment contracts across Opel are to be adapted to 35 hours per week, the company said. It said the adaptation affects employees currently working longer hours under a supplementary agreement and whose departments are facing underutilisation'. It is set to take effect on April 1.

"It is our common goal to make Opel competitive," said Michael Lohscheller, chief executive officer of Opel Automobile.

The agreement struck between the company and German labour union IG Metall also expands part-time programmes for older employees and the possibility of early retirement. Employees born between 1957 and 1960 will be offered the possibility of early-retirement. In addition, the company will offer an alternative senior leave programme for people close to retirement age (up to 36 months) that will enable them to leave the company early and immediately.

The agreement also offers a 'new mobile working programme' to make better use of the benefits of digitalisation for the Opel workforce and 'contribute to the employees' work-life balance'.

There will also be bonuses for managers linked to the turnaround plan and Opel/Vauxhall business targets for 2017.